75 ANNUAL REPORT 2022 STRATEGY & OUTLOOK EXTERNAL VARIABLES, RISKS & OPPORTUNITIES (cont’d.) RISKS • Penalties and fines. • Reputation damage. • Low ESG ratings may cause drops in investor confidence and exclusions from sustainability-rated indexes. • Business activities may be affected by weaknesses in the supply chain. • Boycott or sanctions may be imposed on companies who are seen to have weak enforcement of HLR. • Companies who do not have adequate measures and assurances in place to assuage fear of retaliation may cause would-be whistleblowers to stay silent on wrongdoings. • Sanctions may be imposed on companies who are seen to have association with sanctioned entities. • Complying with sanctions can be complicated, and in this increasingly interconnected world, can aggravate risk exposure. • Corporations may find it challenging to comply with increased technology upgrades and documentation that is required to manage cyber threats adequately. OPPORTUNITIES • Good corporate compliance and sanctions management track record enhances stakeholder confidence, opens up new sustainability-linked business opportunities, safeguards operational effectiveness and enhances business continuity. • Stronger supply chain in terms of sustainability profile improves business continuity. • The advocating of stronger sustainability practises with third parties can contribute towards stronger ESG performance for companies. • Companies with good corporate compliance track records can influence their third parties and external stakeholders in alignment with global climate targets. • Utilising technology can improve whistleblowing processes for employees reporting wrongdoings and compliance teams when managing incidents. • Companies that invest in information security governance will be less likely to face cyberattacks, hence supporting business continuity. STRATEGIC RESPONSE TO OUR RISKS & OPPORTUNITIES Creating a culture of compliance At Yinson, we are committed to conducting our business responsibly and in accordance with the law of the countries in which we operate. This is the ethos or fundamental value of the Group’s COBE and forms the bedrock of our corporate compliance strategy. Our corporate compliance strategy aims to embed compliance extensively and sustainably throughout the Group. Guided by our R.O.A.D.S. Core Values, corporate compliance is more than a check box exercise – it is a question of reinforcing a culture where integrity, honesty and transparency are the cornerstones of our actions. To this end, we promote deeper integration of compliance into our business processes, continuously optimise our training methodology and expand targeted communications. We will continue to ensure our zero tolerance stance towards bribery and corruption and strengthen our internal controls practices. The continued ISO 37001 certification and annual audit process provides us the avenue to further identify best practices and areas of enhancement. Communication is one of the focal points of Yinson’s corporate compliance mission, which is to promote the culture of compliance through raising awareness and provision of compliance-related training. All Yinson’s compliance policies are readily available on our website, YNet and in various physical locations in our offices, and we engage constantly with our stakeholders on these matters. Stakeholder engagement, pg 124; Social & Relationships Capital, pg 156 We aim to extend our compliance strategy further by collaborating with our third parties more extensively to understand their ESG profile, such as their HLR practices, and thereby strengthening the ESG alignment throughout our supply chain. We believe that a good demonstration of ESG efforts undertaken by our external stakeholders will strengthen the robustness of the supply chain and build a solid foundation for sustainability-linked business opportunities. Sustainable supply chain management, pg 157 CORPORATE COMPLIANCE REVIEW
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